ETMarkets Fund Manager Talk-Investors can consider balanced funds as equity, debt market outlook positive: PGIM India MF

economictimes.indiatimes.com:

balanced funds are likely to do well in the current market environment, as both the asset classes of equity and debt are expected to do well, going ahead, says Puneet Pal, head – fixed income, PGIM India Asset Management. “Indian macroeconomic variables like inflation, growth and current account are quite stable, unlike some of the developed economies who are struggling to bring down inflation and facing challenges with respect to growth too,” Pal told ETMarkets in an interview.

Edited excerpts:While RBI is expected to be on a long pause, the same isn’t the case as yet with respect to global central banks. In such a scenario, what’s the outlook for the debt market?Indian macroeconomic variables like inflation, growth and current account are quite stable, unlike some of the developed economies who are struggling to bring down inflation and facing challenges with respect to growth too.

Real interest rates are also positive in India. Thus, we have seen narrowing of interest rate differentials between India and some of the developed economies.

We are of the view that despite some more incremental monetary tightening by global central banks, RBI will be on a long pause. In this context, the outlook on the debt market continues to be positive as the additional tightening by developed economies will mean higher probability of a slowdown in their economies in the future, which will mean that beginning next year, as inflation comes down to within the target range of the developed market central banks, interest rates can come down.Has PGIM seen any impact on flows into debt funds after the recent tax amendments? We have not seen any major impact on flows.